Data Concerning Sotero Corporation's Single Product Appear Below: the Company

question 201

Multiple Choice

Data concerning Sotero Corporation's single product appear below: The company is currently selling 5,000 units per month. Fixed expenses are $319,000 per month. Consider each of the following questions independently.
-This question is to be considered independently of all other questions relating to Sotero Corporation. Refer to the original data when answering this question.
Management is considering using a new component that would increase the unit variable cost by $8. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 500 units. What should be the overall effect on the company's monthly net operating income of this change?

• A) increase of $2,000
• B) decrease of $2,000
• C) increase of $38,000
• D) decrease of $38,000

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Definitions:

Sexist

Discrimination or devaluation based on a person's sex or gender.

Sales Manager

A professional responsible for directing and overseeing a team's sales strategy, operations, and performance.

Nonracist

Describes beliefs, actions, or policies that do not manifest or support racism.

Nonageist

A principle or practice that avoids discrimination against people based on their age, particularly towards the elderly.